Make it make sense, because I'm lost

The global economic fallout from Wednesday's fiscally imbecilic Liberation Day speech, will go down in infamy as a solution looking for a non existent problem, which may take years to recover from.

I want to spend a little time today examining the impact of trump walking up to the podium on the White House lawn and detonating a fiscal IED wired to a stupidity trigger when he opens his mouth.

It’s going to take a few days for the initial shock to settle, before anyone can offer a substantive detailed assessment of the impact on the US economy. It’s also worthy of note that economists don’t have a great track record on economic predictions. They predicted a recession every other day under Biden. We have to be guarded as we react to these fiscally illiterate utterings from the convicted criminal who vacations at the White House during the week. There can be no arguing, almost $3 trillion was wiped off the value of US stocks by the end of Liberation day, so at least we have a starting point. Incredibly the perception is, this loss may well have been based on the assumption that Trump would start to roll back some of these tariffs quickly under pressure. As of writing this, there were no signs of it happening, but the day is young.

Someone commented on my musings yesterday saying, ‘I know we’ve got a problem, just tell us how to fix it’. If I had the answer, I assure you I wouldn’t be sat here writing this post, having a cup of tea, while watching two Robins hopping around the garden fighting over a female. I’d be setting an outrageous fee for my services and planning to leave for the Maldives tomorrow, to write my solution on a beach with an umbrella in my cocktail.

This economic self inflicted wound, is either the plan of a madman, an economic imbecile, or he’s merely a delivery system for a kabal of obscenely rich people looking to dismantle not just the American economy, but the whole global economic framework. This could just be the most audacious global power grab in history. One in which sovereign nations are merely an obstacle to the kabal’s economic ‘final solution’. If this is the case, Lord help us.

Before we explore answers to questions, the American people need to understand just what they are about to sacrifice at the altar of this fiscal lunacy. On January 20th when Trump walked through the doors to the White House, this is exactly what he inherited from his predecessor. Under Joe Biden there was a constant Republican drumbeat of ‘recession is nigh’.

Far from a recession, Biden delivered the fastest post pandemic recovery of any G7 nation, and made America the number one destination for overseas inward investment. This resulted in reshoring critical high tech chip manufacturing. The addition of 300,000 green energy jobs further added to a continually growing jobs market.

All of the Jobs lost under Trump’s catastrophic handling of the pandemic were recovered and 5 million NEW jobs were added. The US economy added jobs for 48 consecutive months, tying the second-longest period of employment expansion on record, according to Bureau of Labor Statistics data that goes back to 1939. Even in the face of a global slowdown in productivity, the US record was world leading.

Biden presided over the longest period of record low unemployment, the lowest in half a century. Economic growth grew so strong and consistently, it presented an opportunity for Trump’s corporate donors to price gouge the American people causing counterfeit inflation, which the Trump campaign then used to attack Biden over cost of living increases. It is estimated by trusted economists, that up to 53% of the inflation rate was driven by the consistent overpricing of consumer goods. This effectively diverted almost half of the benefits of falling inflation from Americans to the bottom line of Corporate America. The same corporate America which had gorged themselves on corporate welfare when they were bailed out during the pandemic.

Americans, were the victims of a corporate street robbery, all while Republicans created a fantasy narrative to blame Biden for the very same challenges being faced by governments around the world.

Just to affirm how strong the US economy was, in a piece in the Economist dated 19th October 2024 The opening paragraph stated:

‘The American economy has left other rich countries in the dust. Expect that to continue…’

Later in November in the same publication, Simon Rabinovitch the US economics editor wrote in a piece which has been updated this month:

The US “.. is the only major economy where output is above pre-pandemic trends. Its unemployment rate is hovering around 4%, well below the average of the past three decades. Even better, the bane of the past few years is fading away: inflation is set to return in 2025 to the Federal Reserve’s target of a 2% annual pace.

The assessment was clear and claims Biden left behind a dumpster fire are simply disinformation from the Republican propaganda machine. Perhaps Republicans were mistakenly thinking about the dumpster fire their guy left behind for Biden in 2020?

Whichever way you examine what Trump did in his declaration of ‘Liberation Day’, the response has been brutal from the markets. The more important concern is how the recipients of the tariffs respond and China has wasted no time at all in imposing 34% on ALL US imports. They also imposed additional new export controls on rare earths including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. It really is difficult to articulate the impact of these additional controls, combined with the tariffs imposed by Trump.

The US imports a huge volume of products from China. The value is estimated to be in excess of $37 billion per each month. This will drive costs up dramatically for US consumers very soon. Trump is beyond delusional if he thinks the tariffs will encourage American companies manufacturing products in China, to shift production to the US. Yes there will be some companies that will make gestures by moving some capacity to the US where they can expand existing plants, but building infrastructure for new capacity takes years not months. If there is one set of tariffs that will really hurt Americans, it’s the tariffs on China.

As markets are just opening today, they are continuing to drop further. With countless sectors set to be hit by these tariffs, it's difficult to know where to begin to comprehend the situation. Needless to say, oil prices have dropped due to fears of stunted economic growth. Markets in Europe had another rougher time this morning. By midday, Germany’s DAX had lost 5%, the CAC 40 in Paris slipped 4.2% and Britain’s FTSE 100 gave up 3.8%. I get the feeling today will see a further bloodbath unless someone convinces Trump he’s doing irreparable self harm.

The Chinese in the background see this move by Trump as a real opportunity. He’s self inflicting a huge wound on the US at a time when facing many problems beyond the economy. We are now seeing moves by China to approach Europe in an attempt to work together. This move on the global 3D economic chess board, is really interesting. While the EU is rightly very wary of Chinese overtures, if the two were to get together to redefine trade between Europe and China, especially given the huge Belt and Road investment the Chinese have made in creating potential frictionless trade with Europe, Trump could just have just inadvertently planted the seeds to make Europe great again and exclude the US. Europe and China working in tandem could quite literally see an end to the US dollar. The coming week will be really interesting to watch, as the global trading system attempts to rewire itself. The truth is, NOBODY trusts America anymore and Trump simply can’t be trusted to act in good faith.

The whole exercise turns into mind games where you are constantly assessing your own sanity. There are few people I dislike more than Karoline ‘Goebbels’ Leavitt, but I have to admire her ability to stare straight down the lense of the camera and just spew lie after lie, after lie in defense of this lunacy. The problem with lies are, as soon as the truth pays a visit, you just look like the idiot you are.

I have to admit, one thing I do find most disturbing right now, are the number of liberal social media influencers announcing with absolute glee, ‘the economy is crashing’ or ‘thousands of workers have been let go’. Jesus guys, spare a thought for those who may not to be able to feed their kids because of this disaster. How can we regain the trust of people we are disgustingly using as propaganda pawns? Show some respect and common sense please. This is exactly why voters get turned off by politics.

What Democrats should be doing right now is using money to fund helplines to provide guidance to the people who will become absolutely desperate as a result of what this administration is doing. But No, instead, what will happen is they will send emails to these same people asking for campaign donations. When will they learn that there are much better ways to reach voters than a speech on the steps of the Capitol building. Do BETTER please.

Tomorrow, I’ll be reflecting on the week and pulling together the threads of events with a few suggestions as to what I think are the next steps for Democrats moving forwards. On Monday, I’ll be doing posting the first of my pieces to camera. A chance for you to put a face to the words you read here each day. Very much looking forward to that.